Tribune judge may rule on bankruptcy exit plan by July

Morning Call parent Tribune Co. may learn by early July whether it has won the first of two rulings it needs to leave bankruptcy this year, lawyers involved in the case said.

Should the judge overseeing the case approve the company's reorganization plan by early July, Tribune may be able to exit bankruptcy by August, or by the end of the year at the latest, depending on how long it takes the Federal Communications Commission to make a key second ruling, Chief Reorganization Officer Don Liebentritt said in an interview Friday.

"The FCC is the wild card," Liebentritt said.

Tribune finished the last major court hearing in its bankruptcy Thursday in Wilmington, Del., asking U.S. Bankruptcy Judge Kevin Carey to approve a plan that would divide ownership of the television and newspaper company among its senior lenders, including JPMorgan Chase & Co., and hedge funds Oaktree Capital Management LP and Angelo, Gordon & Co.

Should Carey approve that plan, the company would need to win approval from the FCC to transfer its television and radio licenses to the new owners before it can exit bankruptcy.

Carey said he would hold a status conference on his decision in early July, if necessary. Lawyers for the company and creditors said after the hearing today that means Carey may rule by then.

Tribune, based in Chicago, is trying for the second time to win approval of a reorganization plan that settles legal claims against the senior lenders that funded the company's 2007 buyout by real estate magnate Sam Zell, which critics said left the television and newspaper company insolvent.

Objectors include hedge fund Aurelius Capital Management and other holders of pre-buyout debt who are being repaid less than the senior lenders.

Once Tribune leaves bankruptcy, pre-buyout creditors, including a group of retirees, have said they will press lawsuits filed in New York against shareholders they say wrongly benefited from the buyout, which added more than $8 billion in debt to the company.

Tribune owes creditors about $13 billion. The company is now valued at more than $7 billion, Tribune said in court papers.